The information contained within this
announcement is deemed to constitute inside information as
stipulated under the Market Abuse Regulation (EU) No. 596/2014 as
amended by The Market Abuse (Amendment) (EU Exit) Regulations 2019.
The person responsible for making this announcement on behalf of
the Company is Rory Mepham.
30 January 2025
Sancus Lending Group Limited (the
"Group" or the "Company")
Trading Update and Junior Funding
Commitment
The Board of the Company today provides an
update on the Group's unaudited results for the year ended 31
December 2024 and announces that its majority shareholder,
Somerston, has entered into a commitment to provide it with up to
£10m of junior funding to support loan financing facilities that
the Company has and/or anticipates entering into.
Trading
Update
At the year-end the Group had loans under
management of £238m, an increase of 18% on the prior year (31
December 2023: £202m), reflecting growth in our UK and Irish
businesses. During 2024 the Company wrote new facilities of £114m,
a 12% increase on the prior year (2023: £102m).
During the year the Group increased its
turnover by 36% to c. £16.8m (2023: £12.3m). Overall, the
Company currently estimates that, after considering the effect of a
gain of c. £2.8m from the repurchase of some if its Zero Dividend
Preference Shares, it will report an at or around break even result
for the year ended 31 December 2024, substantially better than the
loss of £9.0m it reported in 2023. The Board is encouraged by
the strategic and operating actions management is taking. The
business remains committed to returning the Group to profitability
and is targeting achieving run-rate profitability in
2025.
Junior Funding
Commitment
One of these strategic actions includes
ensuring that the Group maintains sufficient financial strength and
liquidity in order that it can execute its growth strategy,
including financing further loan portfolios. The Group, via
its wholly owned subsidiary, Sancus Loans Limited ("Sancus Loans"), has access to a loan
facility of up to £125 million (subject to certain criteria),
provided by funds managed by Pollen Street Capital (the
"Pollen Street Facility"),
maturing in November 2026, and which is currently £105m drawn.
In addition, the Group is also making good progress in
finalising other financing facilities for its UK and Irish
businesses, including with another leading UK challenger
bank.
All of these facilities, including further
drawings under the Pollen Street Facility, require junior funding
to support the senior funds advanced by the relevant
counterparty. The Group is pleased to announce that Somerston
Fintech Limited ("Somerston
Fintech"), a subsidiary of Somerston Group, the majority
shareholder of the Company, has committed to subscribe for up to
£10m of junior funding (the "Somerston Junior Commitment") in the
existing or future loan financing facilities of the Group, subject
to standard conditions precedent. It is anticipated that,
when utilised, the Somerston Junior Commitment will be effected by
Somerston Fintech subscribing for preference shares in, or
extending subordinated loans to, the relevant financing
entity. In addition, the Somerston Junior Commitment can also
be used to subscribe for 8% Sancus Bonds to enable the Group to
provide junior funding to a financing facility of the Group.
Where the Somerston Junior Commitment is used to subscribe for
preference shares, these will carry the same 15% non-cash,
cumulative coupon as the preference shares that Somerston Fintech
currently has in Sancus Loans Limited, one of the Group's
subsidiaries, which were issued in April 2024 and mature in
November 2026. Where the Somerston Junior Commitment is used to
subscribe for subordinated loans to a financing entity, these will
have a non-cash cumulative coupon of 9.75% over the Bank of England
base rate and an additional variable fee such that the target IRR
of the subordinated loan issued is c. 17%, payable at the maturity
of the relevant facility.
Related party
transaction
Somerston Fintech is a related party to the
Company in accordance with the AIM Rules, by virtue of Somerston
Fintech's substantial shareholding in the Company. Accordingly, the
Somerston Junior Commitment constitutes a related party transaction
for the purposes of AIM Rule 13 of the AIM Rules for Companies. The
independent directors (being the Company's directors with the
exception of Tracy Clarke) consider, having consulted with the
Company's nominated adviser, Panmure Liberum Limited, that the
terms of the transaction are fair and reasonable insofar as its
shareholders are concerned.
Notice of
Annual Results
The Group expects to release its audited
results for the year ended 31 December 2024 in March
2025.
For further information, please
contact:
Sancus Lending
Group Limited
Rory Mepham
Keith Lawrence
+44 (0)1481 708 280
Panmure
Liberum Limited (Nominated Adviser and Corporate
Broker)
Chris Clarke
William King
+44 (0) 20 3100 2000
Instinctif
Partners (PR Adviser)
Hannah
Scott
Augustine Chipungu
+44 (0)207 457 2020
Apex Group
Ltd
Matt Falla
Nicola Momberg
+44 (0)1481 755530
